The War on Poverty Hasn't Been Lost, But It Hasn't Been Won Either

Poverty has definitely fallen, but remains unacceptably high.

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Harlem residents choose free groceries at a food pantry run by the Food Bank For New York City on Dec. 11, 2013, in New York City.

Fifty years ago this week, Lyndon Johnson launched the War on Poverty. Ronald Reagan later gave conservatives a running joke by saying "and poverty won." But that’s wrong. As my CBPP colleague Sharon Parrott points out, "poverty has fallen significantly over the past half century, and other poverty-related conditions have declined."

Yet poverty and hardship remain unacceptably high. As Parrott explains:

The poverty story over the last half-century in the United States is mixed for several reasons. A much stronger safety net along with factors such as rising education levels, higher employment among women, and smaller families helped push poverty down. At the same time, rising numbers of single-parent families, growing income inequality, and worsening labor market prospects for less-skilled workers have pushed in the other direction.

CBPP is compiling a chartbook on "The War on Poverty at 50," documenting the successes to date and the challenges that remain. Here are a few highlights:

[See a collection of political cartoons on the economy.]

Official Measure Masks Progress Against Poverty: People may think the War on Poverty has failed because the official poverty measure shows no progress in more than 40 years. The official poverty rate fell only modestly between 1964 and 2012 and was slightly higher in 2012 than in 1967. That measure, however, is seriously flawed. It counts only a family’s cash income and uses a poverty line (the level below which a family is considered poor) that was set in the 1950s and is updated only for inflation. It excludes things like SNAP (formerly food stamps) and the earned income tax credit, which over the years have become an increasingly important part of the safety net, and it doesn’t reflect current consumption patterns.

Without abandoning the official measure, the Census Bureau recently introduced a Supplemental Poverty Measure, or SPM, that addresses many of its problems. The SPM counts not only cash income, but also non-cash benefits such as SNAP, the earned income tax cut and housing vouchers, and it subtracts various expenses, such as income and payroll taxes, child care costs and out-of-pocket medical expenses. The SPM poverty line is based on consumption patterns for a set of necessities like food, clothing and shelter.

A team of Columbia University researchers computed a version of the SPM that takes the SPM poverty line based on 2012 consumption patterns and adjusts it for inflation back to 1967. As the chart below shows, this analytically preferable "anchored SPM" shows a much greater improvement in poverty than the official measure. The poverty rate under the anchored SPM fell from 26 percent in 1967 to 16 percent in 2012.

[See a collection of political cartoons on the budget and deficit.]

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Today’s Safety Net Cuts Poverty Nearly in Half: The SPM poverty rate would have been nearly twice as high in 2012 without the safety net, according to CBPP calculations (see chart below). That translates into 41 million people, including 9 million children who were lifted out of poverty because of measures like tax credits, unemployment benefits, SNAP, Social Security and government health programs.

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[Check out 2013: The Year in Cartoons.]

Some Social and Economic Developments Worked to Lower Poverty and Some to Raise It: The safety net was not the only factor helping to reduce poverty over the past 50 years. As the chart below shows, the share of adults finishing high school rose, families became smaller and women became more likely to work outside the home.

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[Read the U.S. News Debate: Should the Federal Reserve Keep Interest Rates Low?]

At the same time, however, other forces impeded progress. As the chart below shows, income inequality widened, the share of men who are employed fell, and the share of families headed by a single parent grew. Also, after falling between 1964 and 1973, the share of men aged 18-64 who work year round and earn less than the poverty-line income for a family of four has been rising.

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Those who dismiss the War on Poverty as a failure clearly aren’t looking at all the facts. Nevertheless, with many households continuing to face hardship, we’re only part way to where we want to be and we’ve got lots more to do.

Chad Stone is chief economist at the Center on Budget and Policy Priorities.

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